Snowflake (SNOW) 25 Aug 222023 Q2 Earnings call transcript

Company Profile

Participants

Jimmy Sexton	Head, Investor Relations
Frank Slootman	Chairman and Chief Executive Officer
Mike Scarpelli	Chief Financial Officer
Christian Kleinerman	Senior Vice President, Products
Mark Murphy	JPMorgan
Sanjit Singh	Morgan Stanley
Simon Leopold	Raymond James
Alex Zukin	Wolfe Research
Raimo Lenschow	Barclays
Kirk Materne	Evercore
Brad Reback	Stifel
Brent Bracelin	Piper Sandler
Gregg Moskowitz	Mizuho
Pat Walravens	JMP Securities
Kamil Mielczarek	William Blair
Derrick Wood	Cowen
Brad Zelnick	Deutsche Bank
Will Power	Baird
DJ Hynes	Canaccord
Brent Thill	Jefferies
Ittai Kidron	Oppenheimer
Ari Terjanian	Cleveland Research
Tyler Radke	Citi

Call transcript

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Operator

Good afternoon. Thank you for attending today’s Q2 FY ‘23 Snowflake Earnings Conference Call. My name is Hannah and I will be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, Jimmy Sexton, Head of Investor Relations. Please go ahead.

Jimmy Sexton

you call. us thank fiscal Snowflake’s and earnings XXXX afternoon for on joining QX Good in in our me President Q&A Chief and With session. both Kleinerman, of Executive Chairman Slootman, Christian us Officer; and Products, our will Mike for Senior Scarpelli, our Chief join Officer; Montana Financial Vice are the Frank

During second for XXXX XXXX. fiscal our guidance quarter the year we quarter and review full financial our will call, of today’s results the and third for discuss fiscal

forward-looking make expected are will presentation, purposes close April the overall as our posted Form those concerning undue comparisons. including use no from statements evaluate today a obligation Form financial call business, the financial would today XX, changes will we forward-looking SEC financial turn these caution which We the non-GAAP information, call, earnings as available Frank. today’s These is products which internally subject risks and statements, of or related over to and materially a uncertainties, investor actual distributed the long-term refer to as could point performance future filed results. on To would statements future distributed that, to and press in our During ended with quarter measures we press risks for release earlier addition first XXXX new the presented and to update website. not including measures, to that today’s future you with forward-looking like GAAP. undertake any earnings financial replay of XXXX statements in We reliance release call recently statements prospects. Non-GAAP most in growth our means cause call investors.snowflake.com. operational now at period-to-period Information of accordance financial on to July events not differ that GAAP XX, and after measures to our calculated financial and non-GAAP them report A results, duty and strategy, With will features, these measures out market filings, also our we and and for the see to expectations. result are in file quarter SEC. or and ended XX-Q place today’s XX-Q decision-making our the for for our of to in the and a non-GAAP be also are both on results. like please posted substitute reconciliations to will to I We

Frank Slootman

performance revenue to Jimmy the quarter, to good grew Thanks, $X.X $XXX we year-on-year Global year-on-year Product million. XXXX and afternoon billion and Remaining obligations XX% XX everybody. customers. in grew added XX%

leads flow. promoter retention operating and product leverage. the Snowflake free XX% and non-GAAP XXX% revenue of cash continue income high Snowflake to net delivering is and score Non-GAAP with we gross generate exceeded operating exceeded net a rate XX. Our industry growth and margin

prescriptive work workload to processed. copied, to massive from and and Initially, complexity, processes that Snowflake’s was vertical the in Our is their overnight data scale, XX% with data drastically for core organizations to year to customers move edge. and The Snowflake’s legacy one sharing solves insights data back Across the was of led cost scale replicated data at impact architecture risks. Snowflake of regrettable transferred to of fresh first use Snowflake that on cloud Checking be is user in data the enable data stable so removed come types, performance major end. that bring use generations. to base promises sectors, Snowflake enablement. XX% what least to Cloud have the fueled a and Cloud box, up available behind edges reliably $X moved success In customers has having to one of what terms XXXX, are work. relationships number workload solutions sharing growing and analytics for expansion The Data that predictive and is immediate and QX, held economic bottlenecks to analytical improve native to we at using workloads ago. year-on-year. and pertinent an wherever stable up-to-date to This a expansion the customers data Snowflake’s operational call platform led over types. XXX% least types to to with edge, at customer our Starting Data governance from data XX% product of measured broad-based Snowflake solutions. massive industries. it the million cases. data prevent was in data about the revenue, enrichment. business grew and challenge we was used thing. meeting Previously, stable idea by driven Among access be That The has

the example, of For is as chain supply it access. And in coming problem. has and somewhat spiking marginally changing large pandemic part, in the failing a different dislocations hear management This is was in data together. been execution and such such places, data of time which originates how a We many world why is, combination at inflation. and tolerable. realized management this stable supply chain The Snowflake’s levels because day-to-day, is challenging

in the Now change. must quo disruption status massive with

innovation at is aimed Our frontier next development. reinventing application cloud of

reaching. far is ambition Our

and for we capability data now Snowflake brings announced associated We aim XXXX. optionality Users public Conference applications data foundational Powered program. Unistore deployed, built, transactional achieve in representing product Our is and at innovations application to transforming moving Powered scientists. technical to registrants, Summit preview. a These audience our announcements engineers which growth. help systems. fivefold time vision. increase analytical June, to an This that with attendance workloads Snowpark to dataset transacted. Today, more launched from and are a developers Snowflake users’ in by bridge saw data and allows a our for are XX% cloud how we across of XXX single save To effort significant number developers, of quarter-over-quarter Python in in approximate is and sold have transform by this,

Our against the tracking using plan. Streamlit Streamlit integration is scientists applications with recently between well to business enabling by bridges the tools. time insight data gap to acquired accelerating build and their favorite users, developers

table standard offering, in the stored we for to data performance Snowflake emerging preview. announced Iceberg data. the and this support is Iceberg we Finally, externally formats benefits architectures. for lake With of governance Apache private bring

underlying for Applica Applica’s team learning. pleased best-in-class and more data mobilizes announce for We market machine over intent position We types. all to to success. against from technology us advanced our for will to And strategy our analytics turn We partners acquire are data Mike. executing to the create look and opportunities I trends that, and growing and this get call forward believe will value to Applica. unstructured with customers opportunity.

Mike Scarpelli

same revenues to This representing you, year. XX% revenue were performance represents $X.X last $XXX remaining be year-over-year, increase a million, Thank and compared XX our year-over-year as in months. obligations recognized the approximately $X.X RPO, totaling to XX% the product growth quarter Frank. next we billion. grew XX% billion as the expect of QX estimate XX% in Of

XX-month of largest growth and customers. among in net retention product new reflects revenue revenue our customers rate includes with XX Our XXX% durable trailing $X million

We continue a sales strategy. vertical to pursue

services, and are and sciences. retail verticals healthcare advertising, life media core financial and and Our entertainment, CPG, technology

company. the the While most grew overall technology and added growing in rapidly, XX the is sequentially. customers. continual are with verticals growth we financial all drove quarter, media line verticals In growth new move our Advertising, Driving XXXX market. services revenue Global product and up entertainment this

we after product deal. less to Our become XX-month The their our impacted XXXX out that accounts believe customer, signing negatively specific quarter-over-quarter XX% technology largest customers were quarter, years customers grow is by a these than headwinds to businesses. XX called product $X.X average customers QX revenue million. customers. grew revenue A were mixed. trailing results We will their company now these initial from from X top these to Global Last

while saw outperformed. weakness Some we the expected others

believe leading which key metrics, impacting indicators our the business of We are business. economy macro we monitoring our are

are We base. across seeing not customer metrics soften the these

outperformed example, bookings new medium-sized sales For small net corporate addresses businesses our for quarter. team the and goal that their

team use now. of their mentioned customer wins largest our in of as indicate the contributed to X These new continue the earlier, quarter. sales companies And increase top Snowflake world Snowflake. EMEA globally right XX organizations prioritizing Our that in the are

currency Foreign has topic recently. exposure been a relevant

dollar. than revenue X% less currencies than invoiced our U.S. the in However, other is of

our the moment, not given we constant basis currency at evaluate business on the do immateriality. So a

a margins Now, basis. on non-GAAP turning to

Operating enterprise margin centers Our customer outperformance. XX%. X%, product data benefiting in improvement. margin cloud gross year-over-year success our gross public from revenue Scale and contribute to was the was margin

from in was its billion a margin impacted million We with flow and ended investments. had customer a $XX cash paid a who cash, We and short-term prior in years. Our invoice in in long-term adjusted free strong approximately QX in cash collections. $X position positively strong quarter cash QX the by equivalents collected XX%, invoices

turn our to Now, guidance. let’s

in saw and quarter, revenue everyone like QX third we revenue million, year, growth. we unusual the would between For growth that XX%. product XX% last representing between remind expect due reaccelerated product to $XXX to seasonality million $XXX year-over-year and I

Turning to margins.

The with expect XX basis, We expenses diluted we world $X shares our outstanding. expect the million margin X% non-GAAP weighted average a Cloud will events expect of we take our World around XXX QX, Data innovations. operating associated latest Tour. and and on In showcase place million

XX%. XXXX, revenues between representing year-over-year and XX% and For $X.XXX of growth expect we fiscal the between year billion, product billion full $X.XXX

non-GAAP weighted margin, to and outstanding. of expect free includes product expenses X% cash diluted operating related gross Turning adjusted of we to full average acquisition XXX expect and the we XXXX, on Applica. basis, the a operating year flow profitability shares for million XX% The approximately full margin fiscal outlook margin, year XX%

we X,XXX new altered headcount the market almost the our as not support Snowflake for hiring view Year-to-date, have current and have growth We initiatives. are We added year. favorable employees. for hiring adding to plans our net

been than it is questions. executing. long-term line Our that, opportunity look to operator, open has With we you up now the forward and ever for stronger can

Operator

Mark The from first the line of Certainly. proceed. with Murphy JPMorgan. Instructions] question [Operator Please is

Mark Murphy

almost looking it Yes, thank strong. was QX. the I am as sequential much. strong is product growth very at as in very twice you the revenue, It’s which in

activity sensitivity relatedly, data-intensive analyze during insulated And levels changing rate am economic at of an FX So if to you maybe an higher slowdown. think projects consume the sensitivity, customers just looking at be and curious, seeing interest try are area I macro, or many might analytics first, to you etcetera?

Frank Slootman

it’s front prioritized high they picked advanced of learning, machine Frank. going in intersection is industries them analytics. and general, inside the is that Snowflake fairly the going of they have big would are that investing, on I things right are artificial we the they these are are pharma, Customers financial say they In enterprise. intelligence, healthcare, the reason hiring, The the get buying, whole Mark, the be changes opportunity sitting for because to center redefined And computing, gets that in are in are Hey, cloud of up are are industry. in services. to –

usual. So not a this is as business

Let’s to that really pursue a environments towards very try the computing brakes. around having to is and the very, urgency promise brings. advancing opportunity cloud There then it hit high an

are We we short are of very, few that dream where couldn’t becoming very exciting a at things years just living ago. possible a times even

important. this why and going casually to expenses people feel cutback that is on, this are of is that we not because strategically it’s one those compelling So,

Mike Scarpelli

this will SaaS also I a a add, consumption to remind, Yes. just model, Mark, model. is not

takes we months So up if production. before they it go a into some customer, even sign

more there ramping start customers. It’s X continue going XX years. year one That the to We As end in of and signed now quarter. top are didn’t a they of started really to is Global we and signed this that have many there company. technology last mentioned, was ramping quarter would the until I last ramp customer XXXX our last that

because a So you just do can’t see do And a is we it quarter-over-quarter. patterns. consumption model,

And by with customers. go we moving think average of and based our going customers But that specific ramping, large, is to are do continue on upon still us. to most workloads Some our consumption projects. down customers

Mark Murphy

you Thank Wonderful. very much.

Operator

next The Weiss Please Keith you. Thank is proceed. from with Morgan the question of line Stanley.

Sanjit Singh

just you an understanding Singh little you I to conservatism that Thank into seen back or From does the if are abnormally about impressive for in a to historically, guidance high-end the than This in usual. going of year QX could you QX. assuming wanted a guide. strong provide may of sort was seasonal implies for that July? more Very what is X% look Mike, seem I to I seasonal Sanjit quarter. taking sort and the terms trends I talk conservative extrapolating Keith. any the If context bit you have of ask last – QX perspective, you wonder want growth questions. any

Mike Scarpelli

we has our what QX say in since And guidance of philosophy high. unusually Nothing is was would I year went last changed the time public.

So said comparison. prudent environment and macro I And the there is in guidance it’s put year-over-year I the as out. not that we a good right is think uncertainties now,

Sanjit Singh

much. so Thanks Understood.

Operator

Thank James. with you. Raymond Simon line of proceed. Leopold The next question the is Please from

Simon Leopold

Thank pick Thanks I whether question. your pricing? in what or any what to for suppliers over one And seeing is changing Azure? another public you. cloud versus capacity the you are how to taking Google really, with work AWS on your they wanted is see and your not versus criteria and take you the of

Frank Slootman

Frank. is This

multi-cloud public cloud And then strategy. decide Snowflake to and time. on, time, over of run where they okay, And a that sort think and enterprises can change their also it’s typically platform I most oftentimes, also on first can change. that posture over decide going that

We have seen Snowflake customers one-on-one on also cloud. deploy

So expensive pricing one on we that’s does obviously, providers cloud sort have concentration And than these obviously, vary. deployment. to pricing it’s of have our how most And our it is is the I Snowflake cloud on works. we aggressive where mean, top more another. have of

depending customers, matters Snowflake. change it you Snowflake the But to it no is our translates There really clouds running what is and are Snowflake obviously, to dollars on. in the So is reality all cents. is on experience

it economic trade-off, they by platform an cloud over is one why another. it’s that strictly but you public think predicated would usually So picked

Mike Scarpelli

GCP. With XX% XX% in our customers, of is and said, is that AWS majority the plus run and about Azure X%

Simon Leopold

much for detail. you Thank very that

Operator

question next Zukin The you. the Alex from line Please Thank is with proceed. Research. of Wolfe

Alex Zukin

look the about I financial level just of on I – are the metric CRPO mentioned script, a Thanks Mike, tactical next environment consumed changed customers your reference the a question. at with taking investors, your a over have call, of XX much to the months. question. you how prediction think And I increased high guys. guess, wondering for you Hey, lot lot have in the maybe of right actually a be that mix If will optimizations. in you

expectations So Have the now have to that guess the that better optimizations anticipate driving it in in you versus assumptions meaningful not is kind just there saw of Do change conviction you mass dynamics there are seeing that like you the that in And rebased terms some increased I what And a is you is occurring? delivering. and like you were are wave seen – kind what’s feels that in consumption. those those I how that a wanted differential of to around understand made what races off you quarter? workloads? – of

Mike Scarpelli

talking have that’s just showing the had about started to assumptions in about not It’s We I that we are some and time. Optimizations them. Well, something impact any didn’t change same for the new. the quarter. quite them

optimizations. have always done We

– we starting renewals is number were XX% expect contracts. down of have do that They more to our cheaper, are We of function QX we will of more of they when that customers can guys a that. if our regards optimization. With to at that Financial workloads And good lot multiyear because we CRPO those you they the them I Snowflake two efficiently, with there a for that do our showed customers burned use total are more make data the Analyst in become that contracts to real see, Day will RPO, help around to of be we that continue us. a move get

the to in or do the burn in renewal our in happen I customer. QX. a current a they are there percent total a That X-year I they that XXXX really big QX – come as the think them. with line to you’ll as advance, contract. up that But of will X-year multiyear, whether CRPO well. in September that’s has that do with into a function see be been. our of them And And largest historically think contract more will it of will was They that it low going think and of down through then where it that’s So XXs signed

a customers have number of We that. like

more are us. annual that the they bridging amount of they of a moving QX because contract lot renewal. towards their things seeing consuming for term, One co-term we’re are And calling customers, than more really is or their we’re they doing are annual those and are actual renewals annual their faster in what to

Alex Zukin

a why That’s is it. little delta delta versus billings higher? bit the CRPO Got billings

Mike Scarpelli

you, tell a for billings to our business a SaaS at not look it’s don’t have thing I because I meaningless we’re Well, even because company.

more flow revenue customers. We’re cash consumption really on by and focus our

Alex Zukin

Perfect. Thank you, guys.

Operator

Lenschow you. is Barclays. Raimo of next Please proceed. line the from Thank question The with

Raimo Lenschow

you. and investors all the in question. quarter models in activities seeing about this heard new Frank conversations What consumption global and seeing I’m like you has about how the sure Quick XX seeing like an economic gives also Like models left. that Thank customer lower almost I’m customers upfront way etcetera? more But in terms than times, consumption customers. it to in Mike, you then Thank flexibility concern be your are using, on you. for massive a commitment. maybe in little So this they having to of rather bit pay the go talk are incentive tougher should field. what what you’re from

Frank Slootman

want to contract model actually that can then use. to attractive but of I it’s of throttle they a quite for they it’s Frank. thinking way they down, can sign Raimo, up invert customers us, consumption have how whole with because mean, we because sort much and a

model, no not. what You you’re it matter to you’re whether using a or pay can’t SaaS do going that in

us contract down. can knowing customers throttle they and actually more up this So confidence that gives with to

an it’s times in as and the is living in think has which in to media. for a on what sell trade the opposed type the advantage actually we that side of it negative, So we’re been

Mike Scarpelli

Yes. I’ll add to that, too, Raimo.

land start it As when to really a some they customers months reminder, them, small, generally we takes and X start consume. new to very

they have you, to to on from we come are low they for Snowflake on. the I models. to have they existing risk them a do looking is it’s too, workloads, And So different because have buy already we do very to they what money to thing we once what is remind want will have doing. And path more, that an that other save and want customer want many

to commitment, can see you can commitment, You last sign quarter sign you’re a as customer about of And These $X.X are not on most sign a being a to revenue before X-year commitment or from our do if customers are go think I on-demand that of you upfront. million we that’s customers And capacity capacity on-demand. on-demand can a us was they to start X-year a comfortable trying that. new deal. out big making actually go just deals our

Raimo Lenschow

Thank you. Okay, Well done. perfect.

Operator

Thank proceed. Please next the Materne you. Evercore. Kirk question of The with is line from

Kirk Materne

the setup about terms the of Yes. go-to-market, terms about they talk user in away of year? not bit you – could taking what Thanks year, I into terms of some rather as Thanks. coming a partners, if from telling next both are takeaways asking from little maybe you had guess, you wondering of you for of your about of making question. the your in you conference. GSIs Frank, own kind of I remainder And and for investments making but bigger ICVs or the was only the got Snowflake in and feedback in some you

Frank Slootman

Yes.

run I way how weight a had ecosystem ecosystem. the very think size fields in of partner multiple we’re think And choice the punching on was conference of our is. large our and an company football display above I that our how our vibrant it extraordinary how and of to and active part and terms way. purposeful was We a it’s the

stack create try to our We Snowflake. all where you would choice We’re and to have not opposite. buy We things platform. innovation vertically create trying single integrated do to the quite maximum a on

world if presence impactful their customers the be are customers obviously you really in our become in The of and intercept and will, integrators. forcing market channel, your customers, deliver capabilities able and expecting system their the Snowflake’s system to are vice reality marketplace, we is and in high-value, then for integrators because up is to marketplace step hand, the on them We Snowflake. So versa.

leaps are growing and leading. sometimes they following are but more they So than bounds,

why Snowflake always other and that’s is So is of the following. world rest leading the

Mike Scarpelli

the Just first GSI year, north to give GSIs Snowflake. the done services of half million of network. you a $XXX around little the this in have around In data

and than some real I are on another represented $XXX million now. is Our X% that just of resellers. about within make bookings our I to goes product things, our top GSIs the went work. practices QX because of there resellers X% been thing, in very five these more know GSIs channel. These other revenue resale through want of And just chatter it through clear.

consume is very resellers the get on to doing a amount of work are not business. our GSIs customers services But Snowflake. So helpful the direct significant to in

Kirk Materne

you Thank all.

Operator

Thank Brad The of Please with the question is proceed. next line Stifel. you. Reback from

Brad Reback

Hi, XQ you I mentioned comp. consumption thanks know much. very Mike, the

commentary, given Thanks. You RPO also difficult pool? the comp. we really healthy really, But your given that end to should have renewal a year expect a XQ

Mike Scarpelli

Yes.

increase big to RPO. it. expect guiding in have a will I’m not But We we

to have going wait and You’ll guide RPO. see. I’m to never

Brad Reback

much. very Thanks Understood.

Operator

of Thank with Sandler. the you. Please question Piper Brent line next from Bracelin The proceed. is

Brent Bracelin

companies. Good been closed like deals. It where into that’s afternoon. opportunity area down to delays Wanted for large sounds you? several an software other Europe, drill You there – with we large deal is saw large

of some maybe you and a peers? Europe environment talk perhaps about the of just now some right than driving what’s the for little momentum if is the Thanks. you demand different could that So, in

Frank Slootman

last that’s Frank. key there. iconic win but really sort in much overall the really of just in time. customers this bit to one emphasizing We’ve redirection they very that obviously, in and significant very, really some the Brent, over we countries. And moving accounts portfolio some the contributed so it’s regions how so not we how And made gears terms away, comment we markets and in on. Europe – top to large that little seen a reported the us remarks of impact, of And overall shifted lost verticals, We’ve the roster. prepared during quarter and about you taken Yes, has moving large

good we’re the Europe large progress names in the verticals. the about making feeling actually in in key we’re So

So are it’s were headwinds, the it, good. with. wave, feeling The I probably in not really think but the we’re pockets really lot there a what going – more you of you we it’s of commentary, Europe. go, feel of to sort that’s Obviously, if not macro will, the begin farther east you

not So it’s really a factor.

we’re negative not Europe So on at all.

Brent Bracelin

Thank to Great you. see.

Operator

Thank you.

Next line with proceed. of Gregg Please Mizuho. question Moskowitz the is from

Gregg Moskowitz

the question. Okay, thank taking for you

Another committed. primarily below customers threshold has or consumption from those a above had consumption-based XXX% recently for software comment their it a the vendor that unchanged, budgeted been lot have model XXX% what their that been slowing made been the has since NRR but growth deviates

seen of quite this Now guys, customers. was NRR you. dynamic your bigger Thank with any if again enterprise you’ve quarter but overall this strong curious I’m your

Mike Scarpelli

we that No. NRR. Obviously, top been there where to And slowed talked not guidance. with our that’s and down and business specific our about down their continue slowing But some top our they quarter some seeing in things customers to are have last overall, XX, I’ve grow. of

Gregg Moskowitz

Got very it. much. Thanks

Operator

question from Pat Please Walravens of Thank you. The with proceed. the JMP next line is Securities.

Pat Walravens

Snowflake’s from and to on can Databricks take market a congratulations quarter. Great. this Frank, differentiate of that Thank lake the you. you to their me house my let approach approach? offer minute And

Frank Slootman

the platform characterize the has taken lake is of ways many of just are tool on, use one been so with has approach can historically, whereas its the and including – mean, and so they Databricks it I like, another sort that platform, data its you a own we own proprietary Snowflake them.

were tactical commit lake. we being customers a a them tool in to far of more choice to much a more in just So choice strategic the

par Snowflake to really have the our because converged which we table files for tools, prepared we remarks the of this will, a in functionality formats – puts optimized use be format open conventional, Iceberg in mentioned or used configuration. really years, the allows that So by support Snowflake in lake and highly the also using. customers people of example, But for us on you Over completely example, right? in of if it data non-Snowflake most better, pure performance can proprietary are terms traditional,

that – so So aspect of think one that’s I it.

we is as of platform. different And our The comes come other type from from aspect our company obviously, places, background. a a a culture as DNA, different it database Databricks of totally

also different types. user have We

that We coming from high-level a democratize Databricks that’s is for very demand sophistication much to a type have Snowflake have much around a very of platform like And of access or world much approach, skilled technical, rolling the a and deep we very market well. very the as environment. more there very,

is workloads and tools. So in setups types, for type there will of that years, playing many is different lived thing Databricks the facto Snowflake of and type different many, different were user about many, de different say I they workloads that that The last – roles people side-by-side the will have perform. use

want to say you So that, anything about Christian?

Christian Kleinerman

because today reasons getting seeing the approach the you’re of from problems, and is on Frank hear that simplicity infrastructure. of one use comment Net Score our Promoter everything that out quick the on consistently – with not customers we that data to and We the see value mentioned, of solving and deal ease help focus Frank why results the One data said. Yes. customers very you

Pat Walravens

you Thank both. Great.

Operator

Blair. Thank proceed. you. question of William line Please the is with from next Mielczarek Kamil The

Kamil Mielczarek

new provide the organization headcount Can ‘XX. sales your you comfortably solid growth first quarter. you marketing The on – is XX% Thank which revenue? and to take hires rate and uncertainty, in the growth you. in how in the the on detail should do more time where given Congrats ramp both in has fully And be been you’ve reflected long the how half fiscal exceeded macro think Thanks. to of the above new year, investments? the ‘XX you focusing this about it for

Mike Scarpelli

the team, for of tends to to them direct up so and when a sales are we’re our on hiring, principally we period there still within the we takes, of SDRs bit it’s to are today. ramp. guys in that be could deeper verticals continue first and an North junior But also to open after as can we on the large lot accounts train longer want enterprise where corporate sales in ramp of the the altogether a long the of in board to to cycles. biggest inside engineers, year are we the year those covered get new But around lot a onboard And around It’s our is world. because sales those being America which because and verticals. go sale, the depending Well, adding going take are a like sales sales that they we year. a a is the lot well, about people It’s real X-month we’re too, always it little countries is more half The kickoff. people and

Kamil Mielczarek

Helpful. Thank you.

Operator

Thank The question line is the Cowen. Derrick with you. next of proceed. Please Wood from

Derrick Wood

Difficulty] a Congrats on great quarter. Thanks. [Technical Great.

Mike Scarpelli

well. Derrick, we very hear can’t you

maybe? You’re and cutting out. Could in repeat that you

Derrick Wood

Is Can now? me hear you this better?

Mike Scarpelli

Yes.

Derrick Wood

out customers you’re would acceleration curious in see to off. I just because customers activity I and argue wanted XX% given is out to from priority ask about there some prospects of And from on-prem pipeline companies lot And of of the change management stats new migrate systems. come seeing macro – just that of you’ve to hold terms the of would you’d to would shown legacy your environment. maybe that operational the of what off of efficiencies, want think close your migrating But systems. on-prem the argue a some there,

Frank Slootman

I’ve mean, never last make on-premise two iconic were in you names that tell industries comment. go two I’ll people some who different are the and cloud going. in that heard very, staunch week, very that I just one will I ever would now

So are I well as own are feel have of lot this cloud. the is going get breaking to completely said just resistance they they and behind. that you is going left they reasons. what a – is I’m sure But their are people that

that advantage the take of are can’t available You innovations on cloud. only

of out going with we’re back. to you if as I to can people this opposed acceleration So holding agree anything, that see to

Derrick Wood

Thank you.

Operator

Thank proceed. is Zelnick you. Please Brad Deutsche with from of the line The question Bank. next

Brad Zelnick

Excellent. of and My question maybe of Congrats mean, I Cloud sharing you really I just and to for least is, is metric really had stable that, look Frank, there. important being quarter data on the edges, a number if guys, at think Data element guys navigating edge. environment we crazy out a for strong stable Holy about the and one with Grail customers

peak just I us XX% you a a that from had we which it said, day, would versus ago, look Thanks. where Can in is you And you sense I how QX. XX%, the see you of X progress? think maybe to be? what year might said expect also give was unchanged back when think

Frank Slootman

natural there is think a these I progression in things.

things That As to their want with vision – sort that time. of a ambitious on lot more the strategies preoccupied in on all they a risk. of people core with are more takes the is you so execute of starting move lot their want of lot they of to the that place. said, really aggressive, migration. projects they They backlog, lots get where people There have before need is to and for themselves. are capabilities a There their they to to deal do

set I historically we Cloud same that will think the posture, data us, if an data types, up of on overlay incredibly in Because it’s also adopt you predictive that re-siloing blend don’t environment you of end you and of and important bigger data element now data prescriptive will is our that join to customers. up of to have cloud, but promise and Data ability a positioning your and load generate the depends regardless the source problems had. basically ability for So, the And coming solutions and data really science, insights where because on your problem much it’s the for science from.

You can’t predict.

literally that barriers important not your don’t science the you that will to able frustrate now really you really, it’s because data you realize sources up throw data potential new be is So, not there. teams, between only will

that. So, sand in the a we draw on line

are cloud, on which will yourself now that’s going promise front then to have you you us. not be of up for silo-by-silo, you in If go the set the will

Brad Zelnick

much. Excellent. Thanks so

Operator

the question Baird. of The line Power next Please with Will from you. Thank proceed. is

Will Power

strong It Great. Thanks again, really the for taking up-market numbers. looks the on and strong congratulations question like success.

stable million drive more the $X million are helping there sharing, that I I up-market customers of least a just record to like any success? deploying a percentage number customers. those new $X that get or is wanted color, with edges. at think variables there of if common It data sounds are correlation

be great So, you on that from further that too? color would any

Frank Slootman

again. It’s Frank

the now that said I in in years done lot think a mean this what and I be manner. million-dollar can of years particular have making. is accounts in And of becoming the visible lot work it’s a previous we these earlier, culminating Mike

and is But to success. cases industry know So, all is that mean own has share for knew unique data financial an incredibly which things own is networks overnight data. why pronounced you its that Every share it’s institutions important. extremely of services, where to between These familiar and preoccupation I for example, they sharing very use the course, their sub-industry I time. data. a are sharing and need and take need data need it’s not industry we reasons an daily with.

to Snowflake de a on financial institutions has how data. become platform share facto really for So,

very So, that that verticals sharing others that from thing. are more that. sharing get some data We more the than of into taking really more becomes of effect data a certain the to adoption are advanced, feel terms very, in network time in mature powerful

Mike Scarpelli

dollar million for XXX million grow. don’t what what up last continue Global to have customers. $X.XXX from million. is will plus The down. And $X.X revenue XXXX too, is add, I That’s Those Yes. them see quarter, that customers and we and will us, we that driving average large slowing is customers, those from today

Will Power

Alright. Thank you.

Operator

question from is proceed. Thank next The with you. Canaccord. Please the DJ of line Hynes

DJ Hynes

question. impress are cash Hey to guys. margin you showing. about you operating of continue I ask leverage taking mean the Mike, business, the wanted with the flow Thanks to trajectory for I the

XX% guide. guidance this year to You raised the

are or to we XX% here? seeing of trajectory, target. and the was flow we Given not and did that that XX% target into the there, maybe miles do is the the Like the some philosophy are off from sales, accelerated we margin through and term growth of drive the schedule? business longer line, upside achievable investment reinvest from bottom that that ahead productivity What

Mike Scarpelli

Well, are investing we number we going we regards before to that to are to even And get continuing the think invest business. in in about to it. the changing with business,

that’s invest R&D, we continue And adequate dollars we can very our and in at pace, doing sale. And we that. about where what business is are drives do. headcount philosophy. we that’s we headcount think Principally, main will the those But are in drives quick has are changed nothing investment investing because and the the we the we how are see thoughtful adding. what You we with

We will continue to show leverage year-after-year.

Operator

Thank you.

from with Our next question line Brent Thill the of Jefferies. Please is proceed.

Brent Thill

Mike. were are big Thanks strength by? that Frank that We some Any example. particular call you verticals, you standouts hot excited have has and this been just topic, energy out would heard a you On there quarter? an a as saw other verticals

Mike Scarpelli

It’s from Those we the about but is are biggest. it can that huge is revenue the consumers number is that a have And XX% are one not services after financial very perspective, if a for of – look customers, and care they and right not grow big the you about entertainment, financial vertical, services as closely but is some a big, Energy the from then at Snowflake. it. health same. bigger. well, then it Yes. Really vertical. behind revenue about technology of is lot is vertical media three Yes, good our our pretty and XX%,

Frank Slootman

Retail CPG.

Mike Scarpelli

sharing a a stable landed that a big Europe, those about well. large insurance bank. in a we goes edges, on big is financial large, financial segment But We And telco. CPG big landed are we services. we these continue meaningful services company very when landed as accounts and accounts very land Retail is and big the in to We talk in big verticals. data

Brent Thill

quick one And follow-up. Okay.

but taking have is it on on? guidance that share? on looked seen deals stretch Just no on you seeing you do takedown down, taking are just are the seems it is down industry would like just How what incredible is you asking, strength duration. guide you Salesforce.com guide. Are take characterize What seeing…? Is early going and on? you or think you Everyone

Mike Scarpelli

companies in land just an a and our I it’s any the And within that our And are they be that. SaaS and license most customers they when saturated. journey account. users some I may we don’t would drives of small, companies we an They account. When that say, moving Well, most saturated. multiyear Snowflake go to I SaaS of typically land customers. see land, fully think workload-by-workload over stuff they keep

Brent Thill

Thanks. clear. Very

Operator

from SMBC. you. The is of Steve proceed. Koenig the Thank next line question with Please

Unidentified Analyst

Owen Two is This us. questions taking for from related here guys. question. Hey Steve. on Thanks for quick the

near-term? cases. market? you. to And most analytics if First, in operational case? core the near-term beyond second, the that which I workloads in how EDW Thank wondering break can a you you use other to and described opportunity the through the heritage near-term into is then warehouse opportunity And the And would as am become compared use data you prevalent to expect many plans market talk times your that of these bigger

Frank Slootman

that every to day. that’s their cycle to The helped struggled customers really deliver it And reliably specific it out conversations XX enormously. news. data yesterday’s taking okay. They faster running them mentioned very reporting XX-hour prepared because all think opportunities. that, with are has much tell been existing coming. one not the Snowflake business just helps with where the this workload And started additional Christian in some I that’s to It’s the represented. give innovations And We then some X with we you had workloads have this about in and And And what about Frank, But And this will modernization, challenges days, to are are out I that about referred we industry a comment. that I of time very business architectural move I customers. these will a and hear about time a make of to comments. cloud. single long users. customers we as have I are industry will really And them I customers remarks,

average example, drug that customers to years we it a opportunities to XX bring clinical market. seeing pharma trials, have on their reduce For are to takes

off that. You for can They have it. left a year whole to got X monetize years take

economics of to people Healthcare treating say, then is is can put get to an trying for redefine they predictive They place who You in disease. entire go model, industry. provide going let’s what to are protocols help that. predict steer an clear people trying to the entirely and sick to

advertising, different example, In So, and the things to we issues industries conversations very different on. around we these clean are doing. with we all compliance and are now, totally what so and privacy are technologies, for these navigate enabling than doing are room

this a as make million is by business probably this characterize a that, time, I of but that And can reality anymore. day out now. said have data you doesn’t to company, years that warehousing keep it So, but our because of the the X it’s doing not

Christian Kleinerman

data was it. into, traditional teams, we where the of partners. Streamlit around data add speak broadening a engaged applications to. database announcement we largest user interest really see relationship within and customers data part tremendous in but with us. see well capabilities a strong application and not our Cybersecurity we fit for a is with many are we the science data that platform. And Snowflake us, is June, engineering has conference of will both That’s scientists us. workload and an the that opportunity It’s that team, that company see team just personas I are engaged the for We operational the with analyst at the data doing announced and very for on probably

Mike Scarpelli

Western modernization, I on whole like a platform. and end that building reality Snowflake. deploying on are we that a until Those doing People dominates customers. facto the just be mean existence. and time, no our will who but that the were Snowflake de longer quick are the top we conversations of Snowflake. of we having Workload has daily businesses become application customers have are run with that’s applications starting And time follow-up, Union Yes. the development cloud

Unidentified Analyst

Super helpful. guys. you, Thank

Operator

The of from you. Oppenheimer. question next line proceed. the with Please Ittai is Thank Kidron

Ittai Kidron

them wanted even you. months Mike, guess they quarter. nice X environment piggyback get to up a that and being transition? have from that we much smaller little to to made risk into takes into is being lull are in I as into months of right How with production slowdown a earlier the you whatever sign the growth after what in that current visibility prep the I with it a you that’s comment translates customers a the happening Thanks activity into XX is, it bit case cloud. with now of transitions with now, will see your respect the months work in workload number for to do workload customers to what the doing a

Mike Scarpelli

of a lot Well, we have that.

can You see of number north in quarter. the of XXX. Xs landed It last was CAP that we

of planning Snowflake signed All many with upon And to to discussions what on doing. are those customers, we customers, us. know, have they their top we on of based we move plans, our workloads up

want more example, a into customers Snowpark of do that at chomping go our to just number because As have GA with for the to an are they on bit Snowflake. Python we

and with reps. looking So, time And confidence. spend a our that’s engaging we us gives what lot of the

to consumption to the is our for talking customers get months, customers. be six months three next are to with what feel our over We a going like

Frank Slootman

the of macro, models, the These And that about see follow-up, I cloud models. is that. of actually elastic are the are reason are that quick computing accelerate nervousness describing. they exact to right. I because mean are they may going dynamic a these think platform. have to to we people a think consumption the We Just the you going are opposite

So, what vendors. where you use, in model it’s and large be then the you run better you elastic to to pay upfront to when you have on much can for commitments only make demand

to going off. So, get if hold instead anything, I think people of on are a move

Ittai Kidron

Good. Thank you.

Operator

of Ari The you. Please is line next with Thank question Terjanian Cleveland the proceed. Research. from

Ari Terjanian

taking for the the you great and on results. congrats question Thank

start you support. as around Python, earlier from a getting I on provide as and Snowpark, Snowpark the Python’s you little contribution could bit Apache types could feedback consumption currently kind drive and in, Curious, you? made it You are the you referring of you if projects for color up cases when the hoping at are are can what user alluded think the just expecting use you well you announcements to platform what those more for for of was open on customers that involved around conference. when to not

Frank Slootman

that and are is and to the that Yes, finish. red – production Christian jumping and something use it that let some Python for in GA, us customers I to declare are have is Python largest hot, now Snowflake customers wanting them which will start, really maybe of so can for it we we us have. is people

– Open used demand formats is that is the thing anybody everybody that to pressure Iceberg format. Snowflake and up can So, cables be because Snowflake on Table be support open that for to The there. about really completely by the

We that incredible results terms against are seeing of file in like executing performance format. of

the I trying people are So, on are is these them to very, declare these rip pressure hands us all very, out very now. developments right for promising to us. because generally And for of think things that available our

Mike Scarpelli

Yes.

Summit year. conference, be of our at the this said we end those at we GA to As expect

consumption So, next to meaningful a year. happen will contribution

Christian Kleinerman

we Frank soon can. And we the is to said, extremely many as requests this get why, go right. positive, is production as That’s which as go qualitatively, feedback GA

Ari Terjanian

you. Excellent. Thank

Operator

the Citi. of with The Tyler Please question will line Radke proceed. come from

Tyler Radke

Thank you.

I response about about just million new of are net your spend it I or how to to think actually the made almost had ask wanted talking And coming you we talked kind new you you any of Graviton. workloads without thinking new of change hour in some So, to assumptions? optimizations. about projects online. $XX full a

how tracking you. year? for your of half the curious expectations that’s and Thank second Just the

Mike Scarpelli

And our in that on to there. the the of assumptions changes the then always is half No Christian? those? expect year And second biggest impact we

Christian Kleinerman

Yes.

and We price And and of we changes. price to research of performance. the we tens customers. be to and and that significant at for Graviton workloads. commitment to always evaluating improve changes different to have deliver looking best deliver also to continuously is performance that are constantly how the But our our management our do we customers hardware more happened have go are performance one quarter, advantage any that

Tyler Radke

you those able And price on quick if type with I bring Is that? could workloads guess seeing any sneak follow-up, kind to past just in just I Thank the that way a of customers workload it characterize points? handle to in weren’t what of you lower new are you.

Christian Kleinerman

Yes.

We cases, obviously In to – economics, use we a cases are our of related like and liking, is highly very performance, higher part Drewry, it’s lower use migration lighting concurrency lot correlated. they did the of recently. because of but are seeing from and part latency, the which in because better

also migrations to we a lot the coming price performance of all data Snowflake, engineering, that are smart offer. We because transformation, data of on seeing

Tyler Radke

Thank you.

Operator

concludes That participation. you. call. Thank as well question-and-answer Thank session, your the for you today’s as

You lines. may now your disconnect

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